China Stocks Succumb to Global Selloff in Technology Companies

China's stock markets retreated this week as the bloom came off the tech investment boom globally. Traders said it's too early to tell whether the selloff is a temporary aberration or the start of a longer-term trend, amid persistent concerns that the frenzy over AI companies is overdone.

The Shanghai Composite Index fell 0.74 percent on Friday, wrapping up the week with a decline of 1 percent. The tech-focused Shanghai STAR Market 50 index lost 4 percent on Friday. The Shenzhen Component Index tumbled 1.7 percent for the week, and the tech-heavy ChiNext slid 2.2 percent.

"China's A-shares had a delayed response, but they eventually reacted to the tech selloff on Wall Street, which has been a star performer in the past year," said Dai Qing, an analyst with Changjiang Securities.

China Stocks Succumb to Global Selloff in Technology Companies

Caption: The Shanghai Composite Index fell 0.74 percent on Friday, wrapping up the week with a decline of 1 percent.

Elsewhere in Asia, investors dumped AI-related shares. South Korea's Kospi index plunged 5.5 percent, led by chip giants Samsung Electronics and SK Hynix. Japan's Nikkei lost 1.3 percent, ending the week with a 0.4 percent decline. Hong Kong's Hang Seng index dropped 1.2 percent on Friday for a weekly loss of 0.9 percent. Its tech index dropped 1.8 percent.

In Chinese mainland markets, tech shares led declines. Zhongji Innolight, a leading maker of optical transceivers, lost 7 percent on Friday, while chipmaker Cambricon lost 4.4 percent, Biwin Storage Technology plunged 9 percent, and Hygon Information Technology shed 4 percent.

In Hong Kong trading, Alibaba shares fell nearly 1 percent, Tencent lost 1.3 percent, Zhipu AI tumbled 9 percent, and Semiconductor Manufacturing International Corporation, Chinese mainland's largest chipmaker, lost 7.2 percent.

On Wall Street Friday, the tech-heavy Nasdaq plunged 4.2 percent, its worst performance in a year. Nvidia shares fell 6.2 percent, Broadcom lost 8 percent, and Taiwan Semiconductor Manufacturing shed 6.7 percent. The sell-off has revived investor concerns that the rush to invest in advanced technology isn't justified by near-term profit prospects.